The Agora Dispatch — Weekly Newsletter — 18 January 2023
Welcome to the Agora Dispatch — news and views from around the econOHMy
Summary:
Editorial —A finely balanced asset
Marco round-up
Around the econOHMy
Market forces — New target price moves lower cushion
Tap-16 — Opyn Crab, getting snipped
OIP-127 OHM Lending Markets Pilot Program — Passes
Editorial —A finely balanced asset
We think OHM is a finely balanced asset. It has a lot going for it.
Picture an asset with the following exposure:
- 10% of Redacted BTRFLY
- 2% of Berachain
- >60% of Bond Protocol
- $20mm ETH
- $4.5mm CVX
- $1.8mm FXS
- $1mm JONES
- $500K BTC & KLIMA
- ~$300K VESTA, BOND, CRV
- ~$100K ALCX, TOKE, FPIS, LQTY & KP3R
All that — & it is still mostly stablecoins and trading $2 below backing at $9.83.
Holding all that tasty selected exposure has led to an increase in the target rate — discussed more below.
What an asset!
Macro round-up
On the macro front — we saw PBOC & BOJ adding more liquidity which was helped by the weakness in the dollar. This seems to have helped stabilize markets at the current levels — including crypto.
The US will hit the debt ceiling by this Thursday which is much sooner than most expected — and setting the stage for a dogged fight with the new Republican Congress. Zerohedge argues this may well mean the end of QT for the time being & a return to QE by Summer (sorry it’s paywalled).
Davos kicked off with the creepy theme Master the Future — expect it to be full of praise for emerging CBDC projects.
Around the econOHMy
Around the econOHMy we have recently seen:
- Off the back of a huge run-up — Frax let slip in their telegram that they are working on a frxETHbasepool which could change the LSD game again
- FiatDAO — in the closing days of their transition to integrating with Barnbridge — have proposed to sell off their gOHM and D2D and acquire AURA to get ready to incentivize FIAT II liquidity
- Jones DAO did an AMA with GMX about the upcoming release of jUSDC and jGLP — apparently with the white paper tomorrow
- The alOHM proposal over on Alchemix passed — meeting quorum with 62% of the vote abstaining — not a strong endorsement…
Market forces — New target price moves lower cushion
With the uptick in ETH and the handy performance of Jones & FXS (among others), we saw a material uptick in the liquid backing price of OHM.
This sent the price from about $10.50 at the beginning of the year to, at the time of going to press, $10.95.
As the price of backing was elevated this triggered a tick-up in the target price and the lower cushion of the RBS system was manually reset higher to take this into account.
The lower cushion previously was sitting at ~$9.63 and now sits at $9.86.
Stronk!
Tap-16 — Opyn Crab, getting snipped
We have been sitting on the Opyn proposal for a few weeks no doubt Ohmies considering the wide-ranging implications of taking a directional bet (by not taking a directional bet) on the price of ETH.
At the time of press, the no’s currently have it — snipping the proposal with 94% against the trial deployment.
OIP-127 OHM Lending Markets Pilot Program
Finally, we saw the OHM lending market pilot program sail through governance with 99.9% of the vote.
This allows the Treasury to deploy up to 200K in OHM to Euler and Silo for the purpose of lending it out.
This comes with risks of course — someone could borrow it & dump it — thereby shorting OHM. But, as we are so far under backing, that will take a brave degenerate to try.
Developing borrowing markets like this is part of becoming a mature asset & just one more stop on the way to becoming the decentralized reserve.
The initial deployments will be at 5%apy borrow rate so at least we’ll be making a few bucks.
Till next week Ohmies!
